§Week 10

Confidence Intervals
Probability and Statistics Lecturer Team
2024

Week 10 - Confidence Intervals

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 § 6 - Confidence Intervals

Week 10 - Confidence Intervals

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 § 6.1
Confidence Intervals for
the Mean (Large
3 Samples)

Week 10 - Confidence Intervals

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Point Estimate for Population μ
A point estimate is a single value estimate for a population parameter. The most unbiased
point estimate of the population mean, μ, is the sample mean,

Example:
A random sample of 32 textbook prices (rounded to the nearest dollar) is taken from a
local college bookstore. Find a point estimate for the population mean, μ.

34 34 38 45 45 45 45 54
56 65 65 66 67 67 68 74
79 86 87 87 87 88 90 90
94 95 96 98 98 101 110 121

The point estimate for the population mean of textbooks in the bookstore is $74.22.

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Interval Estimate
An interval estimate is an interval, or range of values, used to estimate a population
parameter.

Point estimate for

textbooks

•
74.22

interval estimate

How confident do we want to be that the interval estimate contains the population mean,
μ?

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Level of Confidence
The level of confidence c is the probability that the interval estimate contains the
population parameter.

c is the area beneath the

c normal curve between the
critical values.

(1 – c) (1 – c)
z
−zc z=0 zc
Use the Standard Normal
Critical values Table to find the
corresponding z-scores.
The remaining area in the tails is 1 – c .
Z-score table is needed in this calculation --- see - http://www.z-table.com/
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Common Levels of Confidence
If the level of confidence is 90%, this means that we are 90% confident that the interval
contains the population mean, μ.

The Bell curve area = 1

0.90 Shaded area = 0.9
Reminder area = 1- 0.9 = 0.1

0.05 0.05

z
−zc = −−z
1.645
c
z=0 zc = z1.645
c

The corresponding z-scores are ± 1.645.

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Common Levels of Confidence
If the level of confidence is 95%, this means that we are 95% confident that the interval
contains the population mean, μ.

Area for 95% level of

0.95 confidence = 0.95 + 0.025
= 0.9750

0.025 0.025

z
−zc = −
−z1.96
c
z=0 zc =z1.96
c

The corresponding z-scores are ± 1.96.

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Common Levels of Confidence
If the level of confidence is 99%, this means that we are 99% confident that the interval
contains the population mean, μ.

Area for 99% = 0.99 + 0.005 = 0.995

0.99

0.005 0.005

z
−zc = −−z2.575
c
z=0 zc = z2.575
c

The corresponding z-scores are ± 2.575.

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Margin of Error
The difference between the point estimate and the actual population parameter value is
called the sampling error.

When μ is estimated, the sampling error is the difference μ – . Since μ is usually

unknown, the maximum value for the error can be calculated using the level of confidence.

Given a level of confidence, the margin of error (sometimes called the maximum error of
estimate or error tolerance) E is the greatest possible distance between the point estimate
and the value of the parameter it is estimating.

When n ≥ 30, the sample standard

deviation, s, can be used for σ.

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11
Margin of Error
Example:
A random sample of 32 textbook prices is taken from a local college bookstore. The mean
of the sample is = 74.22, and the sample standard deviation is s = 23.44.
Use a 95% confidence level and find the margin of error for the mean price of all textbooks
in the bookstore.

Since n ≥ 30, s can be substituted for σ.

We are 95% confident that the margin of error for the population mean (all the textbooks
in the bookstore) is about $8.12.

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12
Confidence Intervals for μ
A c-confidence interval for the population mean μ is

The probability that the confidence interval contains μ is c.

Example:
A random sample of 32 textbook prices is taken from a local college bookstore. The
mean of the sample is = 74.22, the sample standard deviation is s = 23.44, and the
margin of error is E = 8.12.

Construct a 95% confidence interval for the mean price of all textbooks in the bookstore.

Week 10 - Confidence Intervals

Continued.

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Confidence Intervals for μ
Example continued:
Construct a 95% confidence interval for the mean price of all textbooks in the bookstore.

s = 23.44 E = 8.12

Left endpoint = ? Right endpoint = ?

• • •

= 66.1 = 82.34

With 95% confidence we can say that the cost for all textbooks in the bookstore is
between $66.10 and $82.34.
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 Finding Confidence Intervals for μ
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Finding a Confidence Interval for a Population Mean (n ≥ 30 or σ known with a
normally distributed population)

In Words In Symbols
1. Find the sample statistics n and
2. Specify σ, if known. Otherwise, if n ≥ 30, find
the sample standard deviation s and use it as an
estimate for σ.
3. Find the critical value zc that corresponds to the Use the Standard
given level of confidence. Normal Table.

4. Find the margin of error E.

5. Find the left and right endpoints and form
the confidence interval.
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15 Confidence Intervals for μ (σ Known)
Example:
A random sample of 25 students had a grade point average with a mean of 2.86. Past
studies have shown that the standard deviation is 0.15 and the population is normally
distributed.
Construct a 90% confidence interval for the population mean grade point average.

n = 25 σ = 0.15

zc = 1.645

2.81 < μ < 2.91

With 90% confidence we can say that the mean grade point average for all
students
Weekin the population
10 - Confidence Intervals is between 2.81 and 2.91.
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 16 Exercise
1
President University wants to estimate the average number of hours per
week that students spend studying for exams. They randomly select
200 students and record their weekly study hours. The sample mean
study time is found to be 15 hours, with a standard deviation of 3 hours.
Calculate a 95% confidence interval for the true average number of
hours per week that all students at the university spend studying for
exams.
2

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